AMENDED CERTIFICATE OF DESIGNATIONS OF PREFERRED STOCK
OF
EDITEK, INC.
Pursuant to Section 151 of the Delaware Corporation Law, EDITEK, Inc., a
Delaware corporation (the "Corporation"), does hereby submit this Amended
Certificate of Designations of Preferred Stock for the purpose of amending the
powers, preferences, limitations and rights of the Series A Convertible
Preferred Stock of the Corporation, as determined by the Board of Directors of
the Corporation pursuant to the authority vested in it by the provisions of the
Certificate of Incorporation of the Corporation and as originally set forth in
the Certificate of Designations of Preferred Stock filed with the Delaware
Secretary of State on January 10, 1996. There have been no shares of the Series
A Convertible Preferred Stock issued.
The Board of Directors of the Corporation unanimously adopted the following
resolutions, effective as of January 25, 1996, with respect to up to Four
Hundred Eighty (480) shares of Series A Convertible Preferred Stock, par value
$1.00 per share, of the Corporation:
RESOLVED:
The Series A Convertible Preferred Stock of the Corporation shall
consist of Four Hundred Eighty (480) shares of Series A Convertible
Preferred Stock, par value $1.00 per share ("Series A Stock"), the powers,
preferences, privileges, rights, qualifications, limitations and
restrictions of which are as follows:
Section 1.Dividends.
On December 31st of each year commencing on December 31, 1996, a
dividend equal to Four Thousand Five Hundred Dollars ($4,500.00) per share
shall accrue on each share of Series A Stock issued and outstanding on such
date. Such dividend shall be payable out of funds legally available
therefor, when and as declared by the Board of Directors of the
Corporation. Such dividends are hereinafter referred to as "Preferred
Dividends." Preferred Dividends which accrue on or before December 31, 1997
shall be cumulative, but Preferred Dividends accruing after December 31,
1997 shall not be cumulative. No dividends shall be payable on the shares
of Common Stock of the Corporation (the "Common Stock") until all accrued
cumulative Preferred Dividends have been fully paid. The Corporation shall
have no obligation to pay any dividend until the dividend is declared by
the Board of Directors of the Corporation.
Section 2.Liquidation, Dissolution or Winding Up.
(a) (i) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of
outstanding shares of Series A Stock, subject to the provisions of Section
2(b) hereof, shall be entitled to be
paid out of the assets of the Corporation available for distribution to
stockholders, whether such assets are capital, surplus, or earnings, and
before any additional payment shall be made to the holders of any class of
Common Stock or of any other class or series of stock ranking on
liquidation junior to the Series A Stock, a liquidation preference in an
amount, for each share of Series A Stock held, equal to Fifty Thousand
Dollars ($50,000.00), plus all accrued but unpaid cumulative Preferred
Dividends and all accrued noncumulative Preferred Dividends that have been
declared but which remain unpaid (the "Series A Liquidation Preference").
(ii) If, upon any liquidation, dissolution or winding up of the
Corporation, the assets to be distributed pursuant to the Series A
Liquidation Preference set forth above shall be insufficient to permit
payment in full of such Series A Liquidation Preference and the Parity
Preferred Liquidation Preference which may be payable to holders of Parity
Preferred Stock (both as defined in subsection (b) below), then the Series
A Liquidation Preference shall entitle the holders of Series A Stock to be
distributed that portion of the assets available for distribution as (x)
the Series A Liquidation Preference bears to (y) the sum of the Series A
Liquidation Preference plus the Parity Preferred Liquidation Preference
(which amount shall be distributed pro rata to each owner of Series A Stock
based on the number of shares owned by each).
(iii)After payment in full of the Series A Liquidation Preference
and the Parity Preferred Liquidation Preference payable to holders of
Parity Preferred Stock (as defined in subsection (b) below) (or after funds
necessary for such payment shall have been set aside by the Corporation in
trust for the account of such holders so as to be available for such
payment), any assets remaining available for distribution shall be
distributed to the holders of the Common Stock and/or other series or
classes of stock, and no further distribution shall be made to the holders
of Series A Stock.
(b) The Corporation shall have the right to create a series or class
(or series or classes) of Preferred Stock of the Corporation with
liquidation rights and preferences which are equal, but not senior, to
those of the Series A Stock, and the Series A Stock shall rank in
liquidation on a parity with any such series or class of preferred stock of
the Corporation ("Parity Preferred Stock") to the extent of the Parity
Preferred Liquidation Preference if the rights of such Parity Preferred
Stock indicate that it is equal to the Series A Stock. The term "Parity
Preferred Liquidation Preference" shall mean the sum of (i) the lowest
purchase price paid to the Corporation upon issuance of the Parity
Preferred Stock, plus (ii) all accrued cumulative dividends (up to a
maximum annual dividend per share of nine percent (9%) of the purchase
price per share of the Parity Preferred Stock) payable to the holders of
the Parity Preferred Stock ("Parity Dividends") which remain unpaid, and
all accrued noncumulative Parity Dividends that have been declared but
which remain unpaid.
(c) A consolidation or merger of the Corporation (other than a
subdivision, combination, reclassification or exchange of shares provided
for elsewhere in Section 4 hereof) or a sale of all or substantially all of
the assets of the Corporation (other than a
transaction to which the provisions of Section 4(e) hereof apply) shall be
regarded as a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this Section 2; provided, however, that,
except in the case of a sale of substantially all the assets of the
Corporation, each holder of Series A Stock shall have the right to elect
the benefits of the provisions of Section 4(e) hereof in lieu of receiving
payment in liquidation, dissolution or winding up of the Corporation
pursuant to this Section 2. For purposes of this Section 2, a sale of
substantially all of the assets of the Corporation shall include, without
limitation, the sale or other disposition of more than 50% of such assets,
as determined by reference to either (i) the book value, or (ii) the fair
market value, of such assets.
(d) In the event of a liquidation, dissolution or winding up of the
Corporation resulting in the availability of assets other than cash for
distribution to the holders of Series A Stock, the holders of Series A
Stock shall be entitled to a distribution of cash and/or assets equal in
value to the Series A Liquidation Preference, subject to the provisions of
Section 2(a). In the event that such distribution to the holders of Series
A Stock shall include any assets other than cash, the Board of Directors of
the Corporation shall determine the value of such assets to be distributed
for such purpose and shall notify all holders of Series A Stock of such
determination. The value of such assets for purposes of the distribution
under this Section 2(d) shall be the value as determined by the Board of
Directors of the Corporation in good faith. The determination of the Board
of Directors shall be final and binding.
Section 3.Voting Power. Except as otherwise expressly provided herein
or as required by law, the holders of Series A Stock shall have no voting
power, and the holders of the Common Stock shall exclusively possess all
voting power for the election of directors and for all other purposes.
Section 4.Conversion.The holders of Series A Stock shall have the
following conversion rights:
(a) Subject to and in compliance with the provisions of this Section
4, during the Conversion Period (as defined in Section 4(c) hereof), a
share of Series A Stock may be converted into fully-paid and nonassessable
shares of Common Stock. The number of shares of Common Stock to which a
holder of Series A Stock shall be entitled upon conversion shall be
obtained by multiplying the Applicable Conversion Rate (determined as
provided in Section 4(b) hereof) by the number of shares of Series A Stock
being converted.
(b) The number of shares of Common Stock issuable upon conversion of
each share of the Series A Stock (the "Applicable Conversion Rate") shall
equal the quotient obtained by dividing (i) Fifty Thousand Dollars
($50,000.00) by (ii) 75% of the Market Price per share of the Common Stock
on the Conversion Date (as defined in Section 4(f) below). Notwithstanding
the foregoing, in no event shall the Applicable Conversion Rate be less
than the number of shares of Common Stock equal to the quotient obtained by
dividing (i) Fifty Thousand Dollars ($50,000.00) by (ii) $2.775. "Market
Price" shall mean for this purpose the daily average for the five trading
days immediately prior to the First Issuance Date or the Conversion Date,
as the case may be, of the closing bid prices quoted on the American Stock
Exchange, Nasdaq National Market System or other securities exchange on
which the Common Stock is traded.
(c) A holder of Series A Stock shall have no right to convert Series A
Stock into Common Stock (A) from the date the first share of Series A Stock
is issued by the Corporation (the "First Issuance Date") until the
beginning of the Conversion Period (as defined below), and (B) all
conversion rights terminate and the Series A Stock ceases to be convertible
on the second anniversary of the First Issuance Date (the "Conversion
Termination Date"). The period commencing on the sixtieth (60th) day
following the First Issuance Date and ending on the Conversion Termination
Date shall be referred to herein as the "Conversion Period." All shares of
Series A Stock not theretofore converted shall automatically be converted
into shares of Common Stock on the last day of the Conversion Period,
unless prior to 5:00 P. M. on the last day of the Conversion Period the
holder of such shares of Series A Stock delivers to the principal offices
of the Corporation written notice executed by such holder instructing the
Corporation not to convert the Series A Stock of such holder. The
Corporation shall not be required to deliver stock certificates
representing shares of Common Stock until the holder of the converted
Series A Stock surrenders the stock certificates evidencing the Series A
Stock as required by Section 4 (f) hereof. In determining the commencement
of a holder's right to convert shares of Series A Stock, the day
immediately following the First Issuance Date shall be counted as the first
day.
(d) If, during the Conversion Period, the Common Stock issuable upon
the conversion of the Series A Stock shall be changed into the same or
different number of shares of any class or classes of stock, whether by
reclassification or otherwise (other than a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4),
then and in each such event the holder of each share of Series A Stock
shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon
such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such Series A Stock might have
been converted immediately prior to such reorganization, reclassification
or change.
(e) If at any time or from time to time during the Conversion Period
there shall be a capital reorganization of the Common Stock (other than a
reclassification or exchange of shares provided for elsewhere in this
Section 4) or a merger or consolidation of the Corporation with or into
another Corporation, then, as a part of and as a condition to the
effectiveness of such reorganization, merger or consolidation, lawful and
adequate provision shall be made so that if the Corporation is not the
surviving corporation, any shares of Series A Stock shall be converted into
preferred stock of the surviving corporation ("New Corporation Preferred
Stock") having equivalent preferences, rights and privileges to the Series
A Stock, except that in lieu of being able to convert into
shares of Common Stock, the holders of the New Corporation Preferred Stock
shall thereafter be entitled to receive upon conversion of the New
Corporation Preferred Stock the number of shares of stock or other
securities or property of the Corporation or of the successor corporation
resulting from such merger or consolidation, to which a holder of the
number of shares of Common Stock deliverable upon conversion of the Series
A Stock immediately prior to the capital reorganization, merger,
consolidation or sale would have been entitled on such capital
reorganization, merger or consolidation.
Each holder of Series A Stock upon the occurrence of a capital
reorganization, merger or consolidation of the Corporation as such events
are more fully set forth in the first paragraph of this Section 4(e), shall
have the option of electing treatment of the shares of Series A Stock held
by such holder under either this Section 4(e) or Section 2(c) hereof,
except as otherwise provided in said Section 2(c), notice of which election
shall be submitted in writing to the Corporation at its principal offices
no later than ten (10) days before the effective date of such event,
provided that any such notice shall be effective if given not later than
fifteen (15) days after the date of the Corporation's notice, pursuant to
Section 6, with respect to such event.
(f) To exercise the conversion privilege, a holder of Series A Stock
shall surrender the certificate or certificates representing the shares
being converted to the Corporation at its principal office, and shall give
written notice (which notice may be made by fax, telecopy or other
electronic transmission) to the Corporation at that office that such holder
elects to convert such shares. Such notice shall also state the name or
names (with address or addresses) in which the certificate or certificates
for shares of Common Stock issuable upon such conversion shall be issued.
The certificate or certificates for shares of Series A Stock surrendered
for conversion shall be accompanied by proper assignment thereof to the
Corporation or in blank. The date when such written notice is received by
the Corporation shall be the "Conversion Date" with respect to such shares.
Within three (3) trading days after the Conversion Date, the Corporation
shall issue and shall deliver to the holder of the shares of Series A Stock
being converted, or on written order from such holder, a certificate or
certificates as such holder may request for the number of full shares of
Common Stock issuable upon the conversion of such shares of Series A Stock
in accordance with the provisions of this Section 4 and cash as provided in
Section 4(g), in respect of any fraction of a share of Common Stock
issuable upon such conversion; provided, however, that the Corporation
shall not be required to deliver stock certificates representing shares of
Common Stock until its receipt of the surrendered stock certificates for
the Series A Stock from the holder of the converted Series A Stock. Such
conversion shall be deemed to have been effected immediately prior to the
close of business on the Conversion Date, and at such time the rights of
the holder as holder of the converted shares of Series A Stock shall cease
and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record
of shares of Common Stock represented thereby.
(g) No fractional shares of Common Stock or scrip representing
fractional
shares shall be issued upon conversion of Series A Stock. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of Series A Stock, the Corporation shall pay to the holder of
the shares of Series A Stock which were converted a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the
Market Price (as defined in Section 4(b)) per share of the Common Stock on
the Conversion Date.
(h) In the event some but not all of the shares of Series A Stock
represented by a certificate or certificates surrendered by a holder are
converted, the Corporation shall execute and deliver to or on the order of
the holder, at the expense of the Corporation, a new certificate
representing the number of shares of Series A Stock which were not
converted.
(i) The Corporation shall at all times during the Conversion Period
reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the
shares of Series A Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Stock, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of Series A Stock, the
Corporation shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose.
Section 5.No Reissuance of Series A Stock.No share or shares of Series
A Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired, and eliminated from the shares which the Corporation
shall be authorized to issue. The Corporation may from time to time take
such appropriate corporate action as may be necessary to reduce the
authorized number of shares of Series A Stock accordingly.
Section 6.Notices of Record Date.In the event (a) the Corporation
establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution,
or (b) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the
Corporation, any merger or consolidation of the Corporation, and any
transfer of all or substantially all of the assets of the Corporation to
any other corporation, or any other entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series A Stock at least twenty
(20) days prior to the record date specified therein, a notice specifying
(i) the date of such record date for the purpose of such dividend or
distribution and a description of such dividend or distribution, (ii) the
date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected
to become effective, and (iii) the time, if any, that is to be fixed, as to
when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up.
Section 7.No Preemptive Rights.The holders of Series A Stock shall
have no preemptive rights or other right to purchase additional shares of
capital stock or other securities of the Corporation by reason of their
ownership of shares of Series A Stock, except as may from time to time be
specified in a written contract between such holder(s) of Series A Stock
and the Corporation.
Section 8.Other Rights.Except as otherwise provided herein or in the
Certificate of Incorporation, each share of Series A Stock and each share
of Common Stock shall be identical in all respects, shall have the same
powers, preferences and rights, without preference of any such class or
share over any other such class or share, and shall be treated as a single
class of stock for all purposes.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be executed on its behalf by James D. Skinner, its President,
and Peter J. Heath, its Secretary, as of this 25th day of January, 1996, hereby
declaring and certifying that this is the act and deed of the Corporation and
that the facts stated herein are true.
EDITEK, INC.
[CORPORATE SEAL]
By: /s/ James D. Skinner
James D. Skinner
ATTEST:
/s/ Peter J. Heath
Peter J. Heath, Secretary